Insurers, hospitals complain to Kreidler about new rule

Health insurers and hospitals, usually on opposite sides, lined up together Tuesday to give Insurance Commissioner Mike Kreidler an earful about his proposed new rule for insurance-provider networks .

Kreidler proposed the rule after complaints that consumers have been taken by surprise about narrower networks in insurance plans offered in the Affordable Care Act. Those networks exclude some of the region’s prominent hospitals and medical centers, meaning some consumers don’t have access to providers they expected to use.

For example, only one insurer offering plans through the Washington Healthplanfinder online exchange includes Seattle Cancer Care Alliance in Seattle; only three include Seattle Children’s, which has filed a lawsuit over the issue.

Kreidler says his new rule is designed to make it easier for consumers to discover which hospitals and providers are in the network for a plan they are considering buying. Out-of-network care, he and others note, can cost considerably more.

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And although narrow networks can help keep costs low, he said, his job is to make sure insurers’ networks can deliver the benefits promised in a timely manner.

The new rule also sets up a number of requirements to ensure that networks have sufficient number and types of providers and facilities so that patients can have access without unreasonable delay. It also sets up minimum standards for including various types of “essential community providers” in different categories, and requires insurers to disclose tiers of networks that require different cost-sharing on the part of patients.

Much furor has arisen over Kreidler’s proposal to implement the rule quickly — perhaps this week — to apply to insurers’ plans for 2015 coverage, which are due May 1. Kreidler says multiple drafts have allowed the concerns of stakeholders, including providers, insurers and consumer groups, to be incorporated into the final proposed rule.

But stacks of letters objecting to the new rule and the testimony in Tumwater Tuesday morning suggest otherwise.

Barbara Gorham, Washington State Hospital Association policy director for access, summed up the tone when she noted that “both sides” were objecting to the rule.

“The fact that both sides are not happy does not translate to this being a reasonable compromise,” Gorham said in the hearing. “What it means is that the process hasn’t been given enough time.”

For their part, insurers complained that
the May 1 deadline didn’t give them enough time to comply.
It will require a large number of maps, calculations and other “burdensome and cumbersome” submissions, said Sydney Smith Svara, of the Association of Washington Healthcare Plans.

Mel Sorensen, representing the Washington Association of Health Underwriters, said the “unintentional effect” of the new rule will be to “collapse choices that ought to be available to individuals and employers.”

Competition, he said, should allow a wide variety of plans and the “widest array of market options.” That “necessarily includes vigorous price competition,” he added, suggesting that hospitals or medical centers that were not included in 2014 networks may be more interested in accepting lower reimbursements next year. “Very likely, you’ll see hotter, more competitive bidding.”

Katie Rogers, representing Coordinated Care, with one of the tightest networks and more than 26,000 enrollees through the Washington Health Benefit Exchange’s Healthplanfinder, said the majority of enrollees are subsidized and very likely were previously uninsured.

The rule, she said, adds costs with “negligible or no gain in access to quality health care,” while stifling diversity. “This was not the goal of the Affordable Care Act,” she said.

On the medical-center side, representatives from Seattle Children’s, Seattle Cancer Care Alliance and others said the rule fails to protect patients.

Several said the new rule erodes the ability of the insurance office to make sure that an insurer is negotiating in “good faith” with a hospital.

Previous regulations allowed the insurance office to look at the substantive terms of an offered contract, said Gorham, of the hospital association, but the current rule forbids it. Insurers, she said, should bear the burden of having to prove they truly did make a good-faith effort to contract with a hospital.

Mark Del Beccaro, of Seattle Children’s, said the hospital has had to spend an inordinate amount of time appealing on behalf of children whose insurer denied coverage for care at Children’s. More than 70 percent of those reviews are ultimately decided in favor of the patient, he said, simply adding time and costs.

“The narrow networks are threatening the access to care at both Seattle Children’s and Mary Bridge [Children’s Hospital in Tacoma],” he said. “In our view it is unacceptable for an insurer to have no qualified pediatric surgeons in network.”

Several speakers at Tuesday’s hearing said the new rule did not ensure that cancer patients could continue treatments already started, and that it ought to require all insurers to allow patients to enroll in clinical trials for treatments.

“It shouldn’t be up to the [insurer] to decide if someone can participate in a clinical trial,” the hospital association’s Gorham said.

All provider networks ought to include a National Cancer Institute-designated center, said Linda Gainer, from Seattle Cancer Care Alliance, because those are the centers with most experience and cutting-edge treatments.

“We have very specific expertise in this field,” she said.

Just this year, 114 cancer patients told the alliance SCCA that the center was now out-of-network for their insurers, she said.

Kreidler’s office, which had planned to put the rule into effect Wednesday, said it will delay a few days to respond to the most recent comments.